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Israel bar on Palestine funds

Jerusalem, Jan. 31 (Reuters): Israel said today it expected to suspend monthly tax payments to the Palestinian Authority, a severe financial blow to the cash-strapped government a week after Hamas’s shock election victory.

Foreign ministry spokesman Mark Regev said the automatic tax payments to the authority would probably stop until the completion of a policy review ordered by interim Prime Minister Ehud Olmert.

Olmert says Israel will boycott any government that includes Hamas, whose charter calls for the Jewish state’s destruction. Palestinian economy minister Mazen Sonnoqrot decried what he called “an irresponsible and grave decision” and said it would have “negative economic and social consequences for the Palestinians”.

Hamas spokesman Mushir al-Masri accused Israel of “trying to steal Palestinian money”. Israel collects customs revenue on behalf of the Palestinians and hands it over to the governing Palestinian Authority each month.

The next payment is due tomorrow, February 1, and is expected to total about $55 million. The salaries of about 140,000 Palestinian employees depend to a large extent on the customs revenue, though Hamas may be able to find alternative sources of funding in the Arab world.

Brushing aside Israel’s call to isolate Hamas, Jordan’s ambassador to the Palestinian Authority congratulated the militant group on its election victory and said Amman “will continue to support the Palestinian people regardless of who is in government”.

Regev said he could not say how long the Israeli review of the tax payments would take, but “pending final decision, it is most likely that automatic transfers will not continue.”

Israel’s position was “in synch” with the international consensus, he said.

But the quartet of major powers trying to broker West Asia peace said yesterday international donors would continue to aid the caretaker government of President Mahmoud Abbas.

The quartet ' Russia, the EU, the US and the UN ' said Hamas must reject violence and recognise Israel or risk losing aid in future. Hamas has rejected as “blackmail” the quartet’s demands it renounce violence against Israel or risk losing aid.

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